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EU slaps tariffs on US as trade war erupts

BRUSSELS, Belgium (AFP) — The European Union slapped revenge tariffs on iconic US products including bourbon, jeans and motorcycles today in its opening salvo in a trade war with President Donald Trump.

The tariffs, which took effect at midnight Thursday, according to the EU's official journal, will further fuel jitters on world stock markets that are already alarmed by trade tensions between the United States and China.

Customs agents across the Europe's colossal market of 500 million people will now impose the duty, hiking prices on US-made products in supermarkets and across factory floors.

Brussels imposed the raft of duties on US products worth 2.8 billion euros (US$3.3 billion) in a tit-for-tat response to Trump's decision to slap stiff tariffs on European steel and aluminium exports.

EU Trade Commissioner Cecilia Malmstrom said this week that the 28-nation bloc was "left with no other choice" but to impose tariffs of its own after the "unilateral and unjustified decision of the US."

Together with US tariffs against Mexico and Canada, the trade battles have raised the spectre of a global trade war, spooking financial markets that fear major consequences to the global economy.

"We have a trade war – and it's an escalating trade war," SEB chief economist Robert Bergqvist told AFP in an interview.

Brussels first drew up the list in March when Trump initially floated the 25 per cent tariffs on steel imports and 10 per cent on aluminium, which also target Canada, Mexico and other close allies.

The list does not specifically name brands but European Commission chief Jean-Claude Juncker spelled out in March that the bloc would target "Harley-Davidson, bourbon and Levi's jeans".

The list also hits clothing along with bed linen and men's leather footwear, eye make-up and lipsticks, plus a host of steel products.

Juncker said today that the US decision to impose tariffs "goes against all logic and history".

"Our response must be clear but measured. We will do what we have to do to rebalance and safeguard," he said.

European consumers would be able to find "alternatives", European Commission Vice President for trade Jyrki Katainen said.

"If we chose products like Harley Davidson, peanut butter and bourbon, it's because there are alternatives on the market. We don't want to do anything that would harm consumers," he said.

"What's more, these products will have a strong symbolic political impact."

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